CSCP Exam Module 3
Sourcing Process - (correct Answer) - 1. Develop/validate supply plan
2. Research supply market
3. Create/refine categories and category
4. Do spend and portfolio analyses
5. Segment suppliers
6. conduct procurement processes
7. continuously improve
Procurement Process - (correct Answer) - 1. supplier selection
2. negotiation
3. order placement
4. supplier follow-up
5. supplier performance measurement and control
6. value analysis
7. evaluation of new materials and processes
Developing Sourcing Competency - (correct Answer) - 1. understand companies goals
2. how purchasing achieves those goals
3. analytical and people skills (i.e. culture)
4. global expertise
5. customer centric
make-or-buy cost analysis - (correct Answer) - A comparison of all of the costs associated with making an
item versus the cost of buying the item.
make-or-buy decision - (correct Answer) - The act of deciding whether to produce an item internally or
buy it from an outside supplier. Factors to consider in the decision include costs, capacity availability,
proprietary and/or specialized knowledge, quality considerations, skill requirements, volume, and timing.
integral component - (correct Answer) - unique to a product, and if it fails the whole product fails
modular component - (correct Answer) - interchangeable with other variants on the market, such as a
computer component
,Determining Core Competencies - (correct Answer) - 1. determine if organization already has it i.e.
overnight shipping
2. determine if there is a need for it in the marketplace
3. determine relationship between the organizations capabilities to deliver the service and the need of
the service
4. if need is present in marketplace but organization does not have core competency, determine if they
should develop it or outsource
landed cost - (correct Answer) - the cost of the item plus logistics and transportation
Considerations for Foreign Suppliers - (correct Answer) - Will foreign suppliers be able to provide the
components in sufficient quantities to meet production needs?
Will the (likely) longer lead times and larger delivery sizes (higher average inventory) be acceptable?
Are there infrastructure constraints that may stall shipments unexpectedly?
Will labor, economic, or political problems suddenly cut off supplies?
Will shipments be secure against pilferage, damage in transit or handling, tampering, and terrorism?
Finally, what other costs are incurred by bringing the components to the manufacturing site from a
foreign rather than domestic producer, such as higher monitoring and control costs?
outsourcing - (correct Answer) - the process of having suppliers provide goods and services that were
previously provided internally. Outsourcing involves substitution—the replacement of internal capacity
and production by that of the supplier.
insourcing - (correct Answer) - using the firm's internal resources to provide goods and services
subcontracting - (correct Answer) - sending production work outside to another manufacturer
Examples of Supply Chain Contracting - (correct Answer) - Supplier relationship management (SRM)
Manufacturing
Logistics and logistics management
Customer relationship management (CRM)
, Information systems
Benefits of Contracting - (correct Answer) - 1. Economies of Scale: access to more customers
2. Risk reduction
3. Increased capital available for investment
4. Clearer focus on core competency
5. Access to new tech
6. Faster development cycle times
Offshoring - (correct Answer) - outsourcing a business function to another company in a different
country than the original company's country
Reasons for Offshoring - (correct Answer) - To take advantage of lower wage and production costs
Enter a new market
Use resources that might not be available in the domestic country
To overcome regulations
Offshoring Complexity/Risks - (correct Answer) - language differences, culture differences, country-
specific processes, and legal, tax, and regulatory differences
less mature organizational levels, less emphasis on total quality initiatives, or less developed information
visibility and technology
failure to perform or deliver on time, failure of technology systems or electrical grids for unacceptable
periods, or theft of intellectual property
Requirements of Sourcing and Timing - (correct Answer) - Cost and target price
quality
delivery
lead time
available capacity
design expertise
time to market
sustainability
Sourcing Process - (correct Answer) - 1. Develop/validate supply plan
2. Research supply market
3. Create/refine categories and category
4. Do spend and portfolio analyses
5. Segment suppliers
6. conduct procurement processes
7. continuously improve
Procurement Process - (correct Answer) - 1. supplier selection
2. negotiation
3. order placement
4. supplier follow-up
5. supplier performance measurement and control
6. value analysis
7. evaluation of new materials and processes
Developing Sourcing Competency - (correct Answer) - 1. understand companies goals
2. how purchasing achieves those goals
3. analytical and people skills (i.e. culture)
4. global expertise
5. customer centric
make-or-buy cost analysis - (correct Answer) - A comparison of all of the costs associated with making an
item versus the cost of buying the item.
make-or-buy decision - (correct Answer) - The act of deciding whether to produce an item internally or
buy it from an outside supplier. Factors to consider in the decision include costs, capacity availability,
proprietary and/or specialized knowledge, quality considerations, skill requirements, volume, and timing.
integral component - (correct Answer) - unique to a product, and if it fails the whole product fails
modular component - (correct Answer) - interchangeable with other variants on the market, such as a
computer component
,Determining Core Competencies - (correct Answer) - 1. determine if organization already has it i.e.
overnight shipping
2. determine if there is a need for it in the marketplace
3. determine relationship between the organizations capabilities to deliver the service and the need of
the service
4. if need is present in marketplace but organization does not have core competency, determine if they
should develop it or outsource
landed cost - (correct Answer) - the cost of the item plus logistics and transportation
Considerations for Foreign Suppliers - (correct Answer) - Will foreign suppliers be able to provide the
components in sufficient quantities to meet production needs?
Will the (likely) longer lead times and larger delivery sizes (higher average inventory) be acceptable?
Are there infrastructure constraints that may stall shipments unexpectedly?
Will labor, economic, or political problems suddenly cut off supplies?
Will shipments be secure against pilferage, damage in transit or handling, tampering, and terrorism?
Finally, what other costs are incurred by bringing the components to the manufacturing site from a
foreign rather than domestic producer, such as higher monitoring and control costs?
outsourcing - (correct Answer) - the process of having suppliers provide goods and services that were
previously provided internally. Outsourcing involves substitution—the replacement of internal capacity
and production by that of the supplier.
insourcing - (correct Answer) - using the firm's internal resources to provide goods and services
subcontracting - (correct Answer) - sending production work outside to another manufacturer
Examples of Supply Chain Contracting - (correct Answer) - Supplier relationship management (SRM)
Manufacturing
Logistics and logistics management
Customer relationship management (CRM)
, Information systems
Benefits of Contracting - (correct Answer) - 1. Economies of Scale: access to more customers
2. Risk reduction
3. Increased capital available for investment
4. Clearer focus on core competency
5. Access to new tech
6. Faster development cycle times
Offshoring - (correct Answer) - outsourcing a business function to another company in a different
country than the original company's country
Reasons for Offshoring - (correct Answer) - To take advantage of lower wage and production costs
Enter a new market
Use resources that might not be available in the domestic country
To overcome regulations
Offshoring Complexity/Risks - (correct Answer) - language differences, culture differences, country-
specific processes, and legal, tax, and regulatory differences
less mature organizational levels, less emphasis on total quality initiatives, or less developed information
visibility and technology
failure to perform or deliver on time, failure of technology systems or electrical grids for unacceptable
periods, or theft of intellectual property
Requirements of Sourcing and Timing - (correct Answer) - Cost and target price
quality
delivery
lead time
available capacity
design expertise
time to market
sustainability
